Naver Drives Q2 Growth
North America's Largest Secondhand Fashion Platform
Adding AI Technology Capabilities for 'Synergy'
Behind NAVER's record-breaking quarterly performance was the North American fashion secondhand trading platform 'Poshmark.' Although there was controversy over the high acquisition price when the acquisition was announced last year, Poshmark has rapidly improved its performance by incorporating NAVER's innovative technology, proving to be a valuable asset.
NAVER's sales in the second quarter of this year increased by 17.7% year-on-year to 2.4 trillion KRW, and operating profit (373.5 billion KRW) recorded the highest quarterly figure ever. In particular, the commerce division's sales rose 44% compared to the same period last year, reaching 632.9 billion KRW, driving growth. The rise in NAVER's commerce business performance cannot be discussed without mentioning the 'Poshmark effect.'
Poshmark, acquired in January, is the largest online secondhand trading platform in North America. As of 2021, Poshmark had 40 million annual active users. Transaction volume was 1.4 billion USD in 2020, 1.8 billion USD in 2021, and 2.12 billion USD last year, with an expected 2.56 billion USD (approximately 3.5 trillion KRW) this year.
When NAVER announced the acquisition of Poshmark in October last year, the news of purchasing it for 1.6 billion USD (about 2 trillion KRW at the time) caused NAVER's stock price to fall. The market reacted negatively. However, since the acquisition in January, positive effects have emerged. Efforts to reduce costs led to a narrower deficit in the fourth quarter of last year and improved performance. Poshmark succeeded in turning an early profit in the first quarter of this year. While it previously generated revenue through a 20% commission rate, it plans to further improve performance by introducing search advertising and live commerce.
Especially as NAVER's search sector sales growth rate was only 0.5% in the second quarter, there is analysis that peer-to-peer (C2C) platforms like Poshmark could be future growth engines. Secondhand platforms show a high lock-in effect as users with shared interests form communities and share content. They play a role beyond just providing product information like shopping malls. In Korea, Danggeun Market, which aims to revitalize local communities, is a representative secondhand platform.
Recently, artificial intelligence (AI) technology has been applied across various industries, leading to sophistication. NAVER's technological capabilities have been incorporated into Poshmark, creating synergy effects. A representative example is 'PoshLens,' launched last month. With just a few touches, it finds products identical or similar to the images users take. It integrates AI image search technology, which forms the basis of NAVER's 'SmartLens' service. This allows consumers to quickly find desired products, increasing satisfaction. In April, Poshmark continued its transformation by launching 'Posh Show,' a live commerce feature. Even after the acquisition, Poshmark has maintained its existing brand identity, and employees continue to work as before.
Manish Chandra, founder and CEO of Poshmark, stated, "The launch of PoshLens is just the beginning of our collaboration with NAVER to provide an innovative experience to the Poshmark community."
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